Analysis of FalconX’s On-Chain Behavior: Will the Impact of SEC Persist and Will Institutions Seize the Opportunity to Buy Low?

FalconX's On-Chain Behavior: Will SEC's impact last and will institutions buy low?

Since Binance was sued by the US SEC on June 5th, FalconX has been transferring large amounts of stablecoins to Binance. In the past week, FalconX has transferred roughly $135 million worth of stablecoins to Binance.

Author: Peng SUN, Foresight News

On June 6th, after the news of the US Securities and Exchange Commission (SEC) suing Binance came out, some institutions began transferring stablecoins to Binance and other exchanges, including digital asset brokerage company FalconX. On that day, it received 37 million USDC from Circle and deposited 29.5 million USDC into Binance.

However, FalconX’s actions did not stop there, and even escalated. In the past week, the author found that FalconX has been almost daily transferring small amounts of stablecoins such as USDC and USDT to Binance, OKX, Coinbase, KuCoin, Bybit and other exchanges. Therefore, this article will briefly summarize FalconX’s recent on-chain behavior.

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According to the author’s incomplete statistics based on on-chain data, since June 13th, FalconX has transferred a total of approximately $153 million worth of stablecoins to various exchanges, of which approximately $135 million worth of stablecoins have been transferred to Binance, accounting for approximately 88%:

• On June 13th, FalconX transferred 31.005 million USDC and 1.145 million USDT to Binance; 2.5 million USDT and 200,000 USDC to OKX; 1.29 million USDT to Coinbase; and 1.6 million USDT to KuCoin.

• On June 14th, it transferred 9.45 million USDC and 2.9469 million USDT to Binance; 200,000 USDC and 1.5 million USDT to OKX; 1.5 million USDT to Coinbase; 400,000 USDT to KuCoin; and 10,000 USDT to OKCoin.

• On June 15th, it transferred 4 million USDT and 400,000 USDC to Binance; 200,000 USDT to OKX; and approximately 230,000 USDT to OKCoin.

• On June 16th, it transferred 13.253 million USDC and 2.95 million USDT to Binance; approximately 410,000 USDT to OKX; 400,000 USDT to KuCoin; 719,000 USDC to Coinbase; 100,000 USDT to Bybit; and 200,000 USDT to Gate.io.

• On June 17, 5.75 million USDC and 2.23 million USDT were transferred to Binance; 300,000 USDT was transferred to OKX; 350,000 USDT was transferred to KuCoin; 40,000 USDC was transferred to Coinbase; 150,000 USDT was transferred to Bybit; and 10,000 USDT was transferred to Huobi.

• On June 18, 1.01 million USDC and 215,000 USDT were transferred to Binance.

• On June 19, 2,465 USDC and 845,000 USDT were transferred to Binance; 600,000 USDT was transferred to OKX; 400,000 USDT was transferred to KuCoin; and 820,000 USDC was transferred to Coinbase.

• On June 20, 33 million USDC, 237,000 USDT, and 8,979.35 BUSD were transferred to Binance; 800,000 USDT, 200,000 USDC, and 155 ETH were transferred to OKX; 800,000 USDT was transferred to KuCoin; and 500,000 USDT was transferred to Coinbase.

• On June 21, the transfers continued…

In fact, behind the transfer of stablecoins to exchanges, the author noticed that FalconX has been constantly collecting stablecoins, ETH, and other altcoins through other associated addresses such as “0x43fe” and “0x55Cb”. As of the time of writing, FalconX’s address holds about 10,131 ETH, 22.8 million USDC, and 3.5 million USDT. It goes without saying that collecting stablecoins is obviously to transfer them to exchanges, but collecting ETH is worth paying attention to.

Since June 6, after FalconX transferred 3,285 ETH to market maker Wintermute Trading, it has successively withdrawn about 3,517 ETH from Wintermute Trading on June 13, 14, 15 and 17. Among them, about 1,496 ETH was withdrawn on June 13; 750 ETH was withdrawn on June 14; about 941 ETH was withdrawn on June 15; and 331 ETH was withdrawn on June 17.

In addition to Wintermute Trading, FalconX has also been withdrawing ETH from Binance and Gemini. Among them, FalconX has been withdrawing 1,753 ETH from Gemini since June 8.

From June 6 to June 12, FalconX withdrew about 8,905 ETH from Binance, and from June 13 to June 20, it withdrew 6,226 ETH.

Additionally, an address marked as a Uniswap user, “0x5797,” also transferred at least 1,447 ETH to FalconX.

So where did these ETH go? The author first observed that on June 19, FalconX pledged 4,000 ETH to Compound and borrowed 7 million USDC.

Between June 14 and June 21, FalconX transferred about 6,886 ETH to OKX in total.

In addition, 526 ETH were recently transferred to Wintermute Trading. Some ETH also flowed into chain addresses such as “0x1389,” “0x7E1c,” “0x1389,” “0x1ce7,” and “0xB224.”

Overall, it is not yet known why FalconX is aggregating ETH and transferring it to OKX, but given FalconX’s frequent transfer of stablecoins to exchanges dominated by Binance and even mortgaging ETH to borrow USDC after the SEC decided to sue Binance, it is inevitable to speculate whether this institution is waiting for a certain opportunity to buy the dip. At the same time, considering that FalconX is an institution that combines trading execution, credit and asset management, and market making, is there another possibility that FalconX is helping other institutions buy the dip?

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